Haulage firm Wincanton sees shares jump on home delivery surge
Shares in logistics firm Wincanton jumped over 10 per cent this morning as the haulage specialist said that full year profit was on course to be “materially ahead” of forecasts.
In a trading update, the FTSE 250 firm said that it had seen a “continued improvement in profitability in July and August, with a particularly strong performance in digital and e-fulfilment”.
In these divisions, Wincanton said that the performance had been driven by an increase in demand for online retail, with revenue now “significantly ahead of pre-COVID-19 levels”.
It added that performance across the rest of the group’s operations was “encouraging”.
The booming popularity of home delivery as a result of the coronavirus pandemic has lifted the firm, which announced a major cost-cutting regime in April.
At the time, it reported that full year revenue had slipped 15 per cent, and warned that “considerable uncertainty” remained about the impact the disease would have on its financial position.
However, since July Wincanton has raised its forecasts twice, prompting the firm’s share price to lift from 155p in April to 199p today.
It has also recently won contracts with Waitrose for London home delivery and with Morrison’s for distribution and vehicle maintenance.
Shore Capital analysts said that today’s announcement was a “further positive” for the firm after the string of contract wins.
“The strong performance in both digital and e-fulfilment is consistent with the commentary from the logistics sector, in general”, they added.
“The fact that results are expected to be materially ahead of market expectations, is likely to be well received by the market.”